Reassessment after compounding remains valid, with remand allowed for verification of work orders and taxable turnover

Reassessment under Section 19(1) of the Kerala General Sales Tax Act is not invalid merely because the original assessment was completed by compounding; the reassessment power remains available, and the contrary view was rejected. Where the reassessment was completed ex parte, the assessee may be allowed to produce work orders and connected records for verification. The assessment was therefore restored to the Assessing Officer for limited reconsideration of the actual taxable turnover arising from the work executed, after giving the assessee an opportunity to place the relevant material on record.

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Issues: (i) Whether reassessment under Section 19(1) of the Kerala General Sales Tax Act was invalid merely because the original assessment had been completed on the basis of compounding. (ii) Whether the assessee should be given an opportunity to produce the work orders and connected records before the reassessment is finally accepted.

Issue (i): Whether reassessment under Section 19(1) of the Kerala General Sales Tax Act was invalid merely because the original assessment had been completed on the basis of compounding.

Analysis: The validity of reassessment under Section 19(1) was held to be covered by the earlier Division Bench view that such power is available even where the original assessment was based on compounding. The Court found no material distinction between the reassessment power under Section 19(1) and the supervisory power referred to in Section 35 for the purpose of this question.

Conclusion: The reassessment under Section 19(1) was validly initiated and the Tribunal's view to the contrary was reversed.

Issue (ii): Whether the assessee should be given an opportunity to produce the work orders and connected records before the reassessment is finally accepted.

Analysis: As the reassessment had been completed ex parte, and the work orders contained item-wise details with rates, the assessee was permitted to place the relevant records before the Assessing Officer for verification. The matter was therefore restored for reconsideration on the limited aspect of the actual taxable turnover arising from the work executed.

Conclusion: The assessee was granted an opportunity to produce the records, and the assessment was restored to the Assessing Officer for fresh consideration to the necessary extent.

Final Conclusion: The revision was allowed in principle on the legality of reassessment, but the assessment was sent back for limited reconsideration after giving the assessee an opportunity to produce the relevant records.

Ratio Decidendi: Reassessment power under Section 19(1) can be exercised even where the original assessment was completed by compounding, and an ex parte reassessment may be reconsidered on remand when relevant records are produced.

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